Financial Physician’s Daily RX
Big Name Companies Not Doing Well!
It is no secret these days that American’s are tightening their purse strings, especially in recent years with the economic uncertainty brought on by of Washington’s inability to govern in a fiscally responsible way.
The retail sales collapse during the recession in 2008 and 2009 has not fully rebounded, and some of the biggest household names in the nation continue to struggle compared to years gone bye.
But don’t offer them a bail-out (Mr. President), it’s a natural progression for businesses and brand names to come and go. Across the country, a vast number of household names and regional stores or chains have become defunct, or given in to liquidation, consolidation or have been absorbed by other companies.
Do you remember Bombay Company, Circuit City, Sam Goody, Kiddie City, Noodle Kidoodle, Beefsteak Charlie’s, Burger Chef, Morrison’s Cafeteria, Steak and Ale, KB Toys, Irving’s Sporting Goods, Jumbo Sports, Rainbow Records, Frank’s Nursery & Crafts, Steinberg’s, Good Guys, Susie’s Casuals, Just For Feet, Bugle Boy, National Auto Parts, Trak auto and Western Auto?
And, how about Borders and Blockbuster, who are both going to be former household names unless something miraculous happens.
24/7 Wall St. took a recent look at the big name retailers which lost the most between 2005 and 2010, and here is what they found.
Drop in sales: -23.5%
2005 sales: $54 billion
2010 sales: $41.3 billion
5 yr. change in stock price: -50%
Drop in sales: -23.1%
2005 sales: $7.8 billion
2010 sales: $6.0 billion
5 yr. change in stock price: +87%
Drop in sales: -22.8%
2005 sales: $9.2 billion
2010 sales: $7.1 billion
5 yr. change in stock price: -83%
4. Office Depot
Drop in sales: -16.8%
2005 sales: $14.3 billion
2010 sales: $11.9 billion
5 yr. change in stock price: -89%
5. The Home Depot
Drop in sales: -16.6%
2005 sales: $81.5 billion
2010 sales: $68.0 billion
5 yr. change in stock price: +1%
6. Foot Locker
Drop in sales: -12.3%
2005 sales: $5.7 billion
2010 sales: $5.0 billion
5 yr. change in stock price: -17%
7. The Gap
Drop in sales: -9.4%
2005 sales: $16 billion
2010 sales: $14.5 billion
5 yr. change in stock price: +13%
8. J.C. Penney
Drop in sales: -5.9%
2005 sales: $18.8 billion
2010 sales: $17.7 billion
5 yr. change in stock price: -52%
Some of the numbers in billions above may not bring a tear to your eye, but the percentages are very telling. Imagine taking a loss of 20 percent of your income.
In their study, 24/7 Wall St. only ranked publicly held companies. Notice how their stock plummeted in some cases. This is a strong indication of how sales can impact the overall health of a company and of every day investors!
Sources: Yahoo Finance and 24/7 Wall St. and Wikipedia